To Dodge Law, High-Cost Lender Offers Cash for Free

TitleMax, one of the fastest growing high-cost lenders in the country, has found a clever way around laws passed by several Texas cities: offer an initial loan at zero percent interest.

TitleMax, one of the fastest growing high-cost lenders in the country, has found a clever way around laws passed by several Texas cities: offer an initial loan at zero percent interest. This photo is of a TitleMax location in Springfield, Ill. (Randy von Liski, Flickr)

TitleMax promises to “make getting cash easy!” To get a loan, borrowers with “good credit, bad credit, or no credit” need only turn over the title to their car.

In Dallas, San Antonio, and Austin – which have all passed lending laws – those loans have come with zero percent interest.

What’s the catch? After 30 days, the loan is due in full. If the borrower cannot pay –TitleMax’s average loan is for $1,300 – the borrower is sent to another TitleMax location outside of the city, where he or she can receive a new, unrestricted loan. That loan, states a contract given to one borrower, could have an annual rate as high as 310 percent.

Of course, the borrower would be free to renew the loan at that location – over and over again.

“It’s a bait and switch,” said Ann Baddour of the non-profit Texas Appleseed. “The practice may not be illegal, but it’s definitely unethical and unconscionable.”

TitleMax declined to comment. Like other high-cost lenders, the company touts its products as an option for borrowers who might not qualify for other sources of credit.

An auto-title loan is similar to its better known cousin, the payday loan – but larger and with more at stake. Typically, the borrower hands over title to her car and agrees to pay off the loan after one month. If she can’t do that, she can pay only the interest due and roll over the principal to the next month.

As with payday loans, the cycle can repeat itself over and over. A study by the Consumer Federation of America and Center for Responsible Lending found that the average borrower renews a loan eight times. A borrower who defaults risks having her car seized. (Disclosure: The Center and ProPublica both get significant funding from The Sandler Foundation.)

In six TitleMax contracts from Texas reviewed by ProPublica, the company actually charged an annual rate ranging from 145 to 182 percent.

The ordinances come at a time of explosive growth for TitleMax’s parent company, TMX Finance, one of the largest title lenders in the country. The company has more than 1,200 stores across 14 states and will soon move into its 15th.

In its home state of Georgia, TMX boasts more than 300 locations – more branches than any bank. (Wells Fargo and SunTrust come closest with around 280 branches statewide each.). The company has doubled in size since 2008 and says it plans to keep up the same rate of growth.

TMX’s growth is especially evident in Texas, where it has opened more than 150 stores in the past two years. It continues to operate in cities that have passed ordinances. Under the names of TitleMax and TitleBucks, for instance, TMX operates a total of more than 80 stores in Dallas, Austin, and San Antonio.

Last December, Texas’s regulator for payday and auto-title lenders announced – without naming TitleMax – that it was “concerned” about the practice of offering a zero percent loan to customers in those cities. The offer might prove too tempting to someone who might otherwise never take out an auto-title loan, said the regulator in a bulletin to lenders: “This business model could also be perceived as a deceptive practice because it appears calculated to bring the consumer into the store with the promise of one product, but later effectively requires the consumer to go to another location to purchase another product.”

In a statement to ProPublica, Dana Edgerton, spokeswoman for the Office of Consumer Credit Commissioner, said that the agency was not aware of any other lenders besides TitleMax offering a zero percent loan.

Despite their concerns, state regulators do not have authority to enforce the city’s ordinances, Edgerton said. It can only warn lenders of potential consequences – a warning TMX has not heeded.

High-cost lenders in and around Denton

TitleMax and TitleBucks Locations

Other high-cost lenders inside Denton

Other high-cost lenders outside Denton

The city of Denton’s lending ordinance, which passed in March, prohibits payday and auto-title lenders from renewing borrowers’ loans more than three times. “That was the biggest thing, just having some kind of end point,” said Kayce Strader of the non-profit Serve Denton and a volunteer for the local alliance Denton for Fair Lending..

As soon as Denton’s law went into effect, according to a class action lawsuit filed in June in state court, TitleMax notified its current customers there would be a change. They would no longer be able to renew their loan in Denton. Instead, customers had a choice: They could pay off the loan in full or accept a zero percent loan. That loan, in turn, would not be renewable at the Denton location. But, the notice says, “We want you to know that we will work with you during this transition period.”

Where to go, then? TitleMax also has a location 15 miles down the highway in Flower Mound, Texas, the notice says. “[You] may want to consider doing business” there, and once you’ve switched, “you can continue transacting at that location,” it says.

According to the suit, the named plaintiffs all got caught renewing TitleMax loans over and over. One allegedly renewed her loan 23 times, paid at least $10,800 in fees, and after all that still owed $3,961. Another, the suit says, renewed her loan twelve times. By switching such customers to a location outside Denton, TitleMax would have been able to continue renewing the loans without restriction.

The suit charges TitleMax duped customers into thinking they were paying down their balance when they were in reality just paying the same fees again and again. TitleMax denies the allegations and is contesting the suit. The company’s attorney declined comment.

25 comments

We should all be more alarmed that our schools are not teaching our children about the real costs of these kinds of loans. It might also be nice to teach our children the importance of meeting their bills current with their current paycheck and defer on unnecessary spending rather than seek gratification and then get sucked into the high cost loan system.

No doubt there are many people who get sucked in because of tragedies in their lives but a great many are pulled in because they want what they want when they want it and never get a handle on the high costs involved.

Teaching basic finance in grade, junior, and high school should be as important or more important than teaching sex education to our children.

PREDATORY LENDERS
“Title” and other predatory lenders as described by PROPUBLICA, including some major bank subsidiaries, create an economic imprisonment that is Dickensian in principle and in fact. Their statements that they are providing a service to those who otherwise have no access to credit are specious at best.

Lending of this nature creates an indenture that is akin to slavery. It would seem to me that the old “Loan Sharks” of yesteryear were more honest in that the borrower at least knew that he risked being kneecapped if he failed to repay the loan including the “Vig”
Papa Maury Clark.

@Bruce: What part of “poor” don’t you get? People like you tend to justify this filthy practice of unimaginable greed inflicted on the poor by not just making them responsible for the condition of their lives - worse yet you don’t know any of these people and have not walked in their shoes - but you justify the filth by suggesting “more education” is all that’s needed. You, I and the rest of this country is one layoff or illness away from complete and utter financial destruction - and it’s like a domino effect beginning the very next day after. Enough of the smug indifference please - this country is dying from the inside out from smug finger-pointing selfish ignorance and indifference.

If I am not mistaken I live at ground zero in terms of the most payday and car title lenders per capita in US; Las Vegas.

These lenders are catering to EMPLOYEES….. by in large working for casinos who may be poor because of engaging in this never ending daisy chain of high cost loans. The operative word is making themselves poor through the process because of lack of education.

If you think these lenders are lending to the real poor in this society; those most dependent on government programs for the vast majority of their income, you are truly mistaken.

If this country is dying from the inside take that up with politicians like Maxine Waters who worked for two years to keep a WalMart from being built in her district. Her dogma kept hundreds of young people from getting jobs. Ms. Waters was flat out quoted as saying people are better off with no jobs than taking non-union jobs at WalMart. The lot where the WalMart was going to be built has been vacant for 60 years and sits vacant to this day. Four other black caucus congressional districts did the same thing.

You take that up with politicians that create more poor people desperate and forced to look to government for everything they have and everything they will ever have.

Your ilk dismisses education because you are forced to face the reality that our education system is more than willing to teach our youth how to use condoms but unwilling to teach fundamental finance.

I am all for shutting these businesses down including the finance firms run by Indian reservations that violate the law. In the meantime, better educated people can put a dent in these businesses by avoiding them and that can only happen with education.

Bruce, did you ever think that maybe, just MAYBE Maxine Waters wants to make sure that her district gets paid a “LIVING WAGE” Bruce, that means a WAGE one can LIVE on. Not being SUBSIDIZED by the taxpayers, so that the TROLL Walton family can increase their mega fortune. Amost 1/2 of the foodstamp money goes to WALMART employees. Maybe YOU do not mind your tax dollars going to increase the wealth of the TROLL Walton Family, but I do, and obviously so does Maxine Waters….. Bruce educate yourself before you criticize someone like Maxine Waters, that will not allow her district be exploited by Walmart, GO Maxine Waters.
Oh by the way, not everyone being exploited by the payday lenders is a gambler, but most are poor, most likely Walmart employees, but that doesnt seam to bother someone like you.

In every story on this sort of financing, going back to when I was a kid (and presumably going as far back as the first loan shark), the industry’s side of the story is that they need to overcharge to this extent and pull all their weird tricks, because they take on the risk of default with every bad-credit customer.

Yet, in this case, they’ve opened themselves up for pretty serious abuse by people with decent money-management skills that just want to mess with them, and they’re still profitable.

This tells me two things.

First, their official story is a lie, and they’re raking in money that far exceeds their risk. That may not be illegal, itself, but it does suggest their businesses can be blown out of the water by someone slightly more ethical.

Second, it shows that their entire target audience are people who can’t pay back their loan inside of a month. That may well be illegal, since you can’t enforce a contract with impossible terms. A move like this shows that they know it’s impossible.

Bruce, one thing I will add on your comments, though, is that there are going to be sufficiently dire situations where you take the loan even though the risk looks far too high. When the choice is to starve today or starve in three months, no education saying that it’s a better deal to starve now is going to be followed.

Pro Publica is all about liberal advocacy, not journalism. In the article it is stated that Title Max was running a “bait and switch” operation. It was not. The lendees got just what they were promised, to wit, an interest free loan for 30 days, not an interest free loan for a week, a year, or ten years, or forever.
News flash: Payday Lender and Title Pawn outfits exist to serve those who, because of a bad credit rating, can’t get loans from institutions historically adverse to taking risks, to wit, banks. The high rate of interest charged by the Payday Lenders, et al. reflects the risk they take when they make the loan that the principal will not be repaid in a timely manner. And guess what? Most of the time the principal is NOT repaid in a timely manner. And yet Pro Publica expresses outrage. I would dearly love to see the Sandler Foundation, which supports Pro Publica, start up a financial institution which would lend money at 7% APR to those with bad credit. Ain’t gonna happen.
Finally, you other commentators should check your facts before you run at the mouth:
@dsk-“almost 1/2 of the food stamp money goes to WALMART employees.” Highly unlikely as food stamp recipients currently number about 47.6 million in the USA and WALMART has about 2.2 million employees, worldwide.
@john-”...entire target audience(of Title Max) are people who can’t pay back their loan inside of a month. That may well be illegal, since you can’t enforce a contract with impossible terms” That’s a good one, Sir. Under Contract Law, however, simply not having the money when the loan is due does not render the contract one of adhesion and thus void or voidable.
@ bruce- Keep up the good work. You are on the right track. There is NO free lunch.

Walter, there’s one difference. If I loan you money knowing full well that you won’t have the money, then the fault is clearly mine, not yours, just like I can’t blame you if I hire you to spin straw into gold.

I’m glad that the lawmaker doesn’t want that scummy, wage slave corporation walmart in her backyard. Seriously I could probably dress up like a homeless person, and in the right area, panhandle and maybe make close to or maybe even more than $8 an hour. Corporations like that don’t help anyone except the CEO’s. A Costco would be much better, from what I’ve read, they do pay a living wage. Seriously, what good is making $64 a day at walmart going to do for anyone, not gonna pay the rent, food, utilites, insurance.

@John
As I recall, the question was one of legal impossibility as a defense to full contract performance. Indeed, according to the facts recited in the article, the lenders actually had the full amount in hand on day one to pay off the loan in toto. The lenders did not have the cash to pay off the loan on day 30. Was that someone’s fault? If so, whose fault was it? As for hiring me to spin straw into gold, you would never make the offer and I would never take the job. Best you not give me an advance as no court would ever enforce that contract, having taken judicial notice of the fact that gold does not come from spinning wheels.

Paul, you have only shown how ignorant you are of fundamental economics and the economics of supply and demand.

How many people in Maxine Waters’s district would be willing to pay the annual fee to Costco? Forget that question. Let’s try reality. That community has to walk before it runs. That means a successful Walmart has to precede ANY, I repeat, ANY consideration by Costco of entry into a poorer community. Reality, just look at where Costco locates and it will be more than clear their demographic is NOT Maxine Waters’s district.

It saddens me just how ignorant you really are….. poor people need low cost more than middle class people and Walmart like it or not meets the needs of lower income people. So do Dollar Stores and Dollar General.

$64/day for a part time student trying to hold a job and go to school is a great opportunity for the future. I worked at ToysRUs for half that a long time ago while I was going to school.

Your problem is you actually want to redefine economics such that low skilled workers are overpaid to provide their services…. Oh, we already tried that with unionized workers and look how well that turned out as one of America’s great cities, Detroit, has been turned into a toilet.

You liberals really need to grow up and understand the construct of the world that is; not your naïve notions of what you believe the world should be….. better yet, I wish all of you great wealth and let’s see if you would deploy it the way you expect others to deploy their hard-earned wealth.

UNCONSCIONABLE.
I’m no lawyer, but I do know some basic business law.
I wonder it these loans could be null and void on the grounds that they’re unconscionable.
Quote: The unconscionability defense is concerned with the fairness of both the process of contract formation and the substantive terms of the contract. When the terms of a contract are oppressive or when the bargaining process or resulting terms shock the conscience of the court, the court may strike down the contract as unconscionable.
End Quote
310%? If that doesn’t shock the conscience of the court, we’re doomed.
Just askin’

@Bruce: This is not a soapbox nor do I want you to feel I or anyone else has the right to attack you for your opinion - BUT.

You’ve made it a point to comment on Maxine Water’s decision to block Walmart from building in her district and you make a case that sounds suspiciously akin to “crawling before walking” but the problem with that is far too many people like you - including you - absolutely love to give uneducated opinions without benefit of real facts. I say “uneducated” because you accused Ms. Waters of not acting in the best interests of her disictrict for opposing the decision to build a Walmart in the district yet you don’t know anyone in that community or their circumstances or the reality of their lives. Further, you stated a Walmart job at $8.00 per hour would be a great opportunity for the people of the community apparently because you feel “those people” should be grateful for any opportunity to be employed. I don’t know anyone in Ms. Water’s district either but I make less than $10 an hour so I know what that feels like - an endless cycle of exploitation and poverty with no windows or doors. I also know that a Walmart job and two bucks will buy a cup of coffee - and that’s about it. Just yesterday The New York Times ran a feature article the gist of it stating in 32 states it’s easier to live on welfare than on minimum wage - and that’s not to say people in that position are lazy and prefer a handout but that it in the U.S. it is impossible to live on minimum wage. Walmart wages are actually less than minimum wage because most of their employees are allowed to work only 32 hours per week. For a moment imagine one the biggest corporations in the world whose principal owners - the Walmart family - have personal fortunes of over 50 billion dollars each - yet the majority of their employees receive food stamps. Perhaps sooner rather than later the people of this country will collectively open their eyes to the fact the American Dream has become a nightmare of Congressional approval to exploit and prey on the poor and defenseless.

I was like you once so I won’t argue your opinion. Unless we experience certain things in life it’s difficult to relate those things to our present circumstances - the point is it’s easy to find a way out with an open door -but a closed door and no windows changes everything.

Also I reiterate once again that I disagree with your opinion that teaching financial education will solve the financial difficulties experienced by many indebted to payday lenders - particularly the condition of poverty. You may be surrounded by casino workers utilizing payday lenders because that is your reality - but like the proverb of the elephant and the blind men -there are many different “realities”.

Some states allow cars to be grabbed if one has just a story of justification, without any process being followed beyond that.

To steal someone cars and it be not criminal all you have to do is say the owner is late making a payment on it- so there is not any benefit to the contract being unenforcable unless the car is secured by a garage that won’t release it to anyone without a court order, and such a garage might be breaking the law in some states I bet.

Nor do such corporations have any skin in the game despite some of them being owned by our largest banks.

One of the original credit card companies it’s awesomely ignored by all apparently above loaned every month, forever, interest free, to it’s customer’s. They did this for decades and until recently had no fee even if you always paid it back.

A law that said anyone filing bankruptcy can not drive, and plenty of laws prevent driving to unemployed parents for example, or those falsely civilly accused of not hiring banks sufficiently to handle there cash etc especially we hear in the ungoverned unstated zone of our district in washington, is best understood as a tool to discriminate against those not good marks, to increase even further the disgusting margins on being far worse then greedy- being sadistic, being willing to earn even less for hurting others then helping them would pay, because you get off on that sort of thing like the TitleMax’s of our world are ultimately realised to be.

They are just wrong. Dirty. Clowns. Sick. Probable cause exists to search there basements for little girls tied up and toyed with if we can’t shut there day jobs down.

Yes they have always been around. But those with money are too evil to borrow from them and even if did interest rates are too low to win against them even given such success of getting the rest of us to act on more then whim.

That’s where government comes in. Only it can pay people to borrow from them for a fee- just kidding. The real damage is lending to people for them to buy cars period. It’s this activity in the civilised world that has us littering our ground with garages and cars still being so poorly engineered that most of us consume several in a lifetime. We are all too poor to be in a position to buy a decent car as teenager’s and so the car must not continue to be collateral.

Lender’s should be free to loan to people, but not over this gruesome bone. It after all has become for many there only home, and more then real homes should be leased, not sold, if the driver has no real access to the necessary gold.

Title max is just a token of what happens when we give away public land to GM’s to now ultimately smoke tar sand and have most of us regard the news as just bland.

We give them the free roads to tease thousands out to prey upon our people even further with. If someone needs one of these loans what the hell are we doing let them drive down OUR roads for free?

To borrow like this is to not be financially responsible enough to drive in public. To provide insurance to anyone so borrowing must be understood as the real evil doing- who is getting the loaned money after all? It’s not going for food as much as for faking responsibility for those not responsible for a fee? The pig driving the car with the android that moment by mom tells the cops if he’s stopped whether he’s current on the fee? Like it doesn’t matter if by the time they get home the coverage has expired or been bounced off again snail mail being too long to best profitably froth up the throng?

It is the car itself that creates the moral hazard. We have fort knox for a reason. This is not India. People who are poor deserve decent mobility or communities they can walk etc. in. A saftey net that allows them to have the courage to leave the keys on the counter instead of drive THERE car to the next town so they can never lose there frown. The bondage results from us not being equal if unclothed by used car encampment. Food stamps are nothing- these banks are providing housing in our curbs without utilities, heat, or anthing neat but what they charge to prolong familes time in steel tents. Anyone willing to give up there car deserves three hots and a caught and no locked door forever without having to fork over labor to china import store- in that fact you either adore America or are a vindictive grunt who envies every runt.

Couldn’t agree more Tutt. I believe someone with an Ivy League education did an experiment and wrote a book about it. They took a cashier job at Walmart to see if anyone could survive on their own and make ends meat. They couldn’t, minimum wage has not kept up with inflation. You are better off being a surf/indentured servant like in the middle ages. At least you are guaranteed a roof over your head and food. I’m not poor or rich, I make about $40,000 annually, but I’d choose welfare and food stamps over an $8 an hr job any day. Conservatives believe that certain people were put on Earth to serve them. It’s funny how they hide behind morals and religion also. I’m sure Jesus would be all for greed, wealth, and exploitation, lol. Extreme capitalist eventually fall and crumble from greed. I believe we are in the beginning stages. Things will continue to get worse as the country’s population grows and more and more jobs become poverty level or get shipped overseas.

@Bruce. People like you who think $10 an hour is overpaid for ANY type of work makes me sick. You must be a really smug, disgusting person. I wonder how many slaves you would have owned if you were alive 200 years ago?

I’ve been clear enough but failed to mention what I’ve recently learned also explains more fully how and why so many of us still are always burned.

We are being denied the right to invest. A special class of people exists, those allowed to speculate too often against the interest of all the rest.

This is what the crowd sourcing legislative debate is about that has almost nobody shouting despite years if not decades of delay in executing aspects even of the settled fray. It is why schools with huge endowments shake, there hearts visibly pounding all away and each day, potentially enough to deny us our rightful way.

With the yield from college having gone down as fast or faster then the cost of access has spiralled up on borrowed money they are insolvent pending only publication of the data Obama is paving the way for release of. That same capital we are lending kids can really change the world now as they are about to reconsider who to give it to. It’s on ‘gogo’ sites that diploma printer’s of the finest past recognition fear real competition. A average young american can borrow tens of thousands of dollars and give it to at best them fruitfully hollers. IT hasn’t happened yet because only ‘give’ not lend. You under existing law have to be over thirty, or stinking rich, to be such the omnipotent bitch. College kids play online poker because there not allowed to save the planet by instead making derivitive wagers against say ‘free lunch’ road builder’s evil plans that would be CERTAIN to earn safe returns in the teens or venture trivially into even purer profit streams.

Not even one share of one penny stock can a volleyball playing nineteenyear old with a $50,000 a year debt load at vassar dare invest in. Where are the free market tools about this real gool? ‘Public’ trading does not exist of real ventures so they come forth not brisk- we all stand looking down at them saying ‘tisk tisk.’

get a degree

aspire to no more othen pay the payday fees

you, the public, are just ordinary sleaze. your money must not count- it’s loaned to you but you can’t spend it as you see fit.

pay it back

but don’t sniff at developing any knack!

Feel free to borrow a month for free on what you’ll die if denied use of even briefly easy- but you must not lend a dime to anyone with guts to kick the real bastards in the nuts.

Bruce, you bring up the Detroit auto industry, which is an extreme example of overpay while Walmart is an extreme example of underpay. I’m saying there needs to be a happy medium. Do factory workers deserve $70,000-$80,000 a year, hello no!! Do they deserve $20,000- $25,000 a year, hell no!!, can’t pay the bills. Do they deserve around $35,000, hell yes!!!, just enough to make ends meat, not overpaid.

Serfs and indentured servants were slaves to the land or the household they worked for and if an entire family was indentured or serfs and the master took a liking to your wife then you turned your head while the master did what he wanted with your wife.

I don’t think things are so bad that anyone could ever agree with your insane and inane proposition.

I worked as a youth for $1.85 minimum wage. I delivered 214 Mervyn’s weekly shoppers to 214 doorsteps on a walking route for $2.14 each time. I delivered newspapers, I worked as a gardener’s assistant and a handyman’s helper. The most earned from those jobs was $2.50/hour (circa early 1970s). I worked for what I was offered per hour. I didn’t get to define what I earned and I only earned more when I showed I could do more.

I am the smug disgusting person? The problem with you Paul is you are an entitlement liberal that probably has never taken the plunge into entrepreneurial risk and let politicians lead you around by the nose telling you rich businessman should be able to pay whatever minimum wage the government sets.

Your writing are a walking and talking set of liberal points of view. Hundreds of thousands of jobs are being in-sourced again. In the case of textiles for example a new factory in North Carolina with state of the art equipment needs 14 people to run it. Previously, that factory required 200 people.

Higher wages….. higher than the market will bear…. ALWAYS result in a market adjustment and that adjustment favors machines over people and that is the way it has always been and always will be…. when low skilled people get priced out of the market decisions are made to find ways to do the same amount of work with fewer people.

All I have to do is watch what the market says and when textile jobs are returning but at levels no where near what left the US the market has spoken about wage rates of low skilled workers; not me!

Frankly, I would like to see the minimum wage go up as high as you want it to go and then you explain why so many jobs are lost or never created. You live in the world of naïve fools if you think anyone…. any of us can look to government to impose floor levels of wages.

I started two successful businesses and we had to hire engineers and scientists and we paid top dollar for talent. When we hired lower level lower skilled employees we paid what the market told us we had to pay. What we did not do is overpay for lesser skilled job sets and always re-evaluated whether employees deserved higher wages if their skill sets advanced.

Paul, you want everyone to be paid the same regardless of skills…. those are called unionized jobs and we all can look at Detroit and see a great American city turned into a toilet because of egalitarian and socialist agendas that in the end failed to benefit big labor.

Gentlemen, I can understand how the dialogue morphed from predatory lending practices, and the foolish, desperate people who avail themselves of such lenders, but both the complex original topic, and the authors well-written exposition have become lost in ad hominem.

“Fair” wages and labor practices, failed educational options, and the gullibility of mankind when making decisions- all are worthy topics, but please stick to the subject that was so well delineated by the author, Paul Kiel.

If the topic were to have been the quality of orange juice, little would be gained by fussing over the color blue as a theoretical alternative to the color orange, regardless of the quality of the juice.

Why does the government have to protect idiots? If they want the use of cash for the month, and are willing to put up their car as collateral to obtain that cash, if they do not use the new capital constructively to create MORE cash, then they lose their car.

Or they enter into a debt cycle.

Why do we need more handwringing to protect people from their participation in an underserved market sector where there is obviously established need?

Are all of you suggesting that when the person who needs that 1300$ loan the government should just give it to them? If they are willing to put their car at risk, who are you to judge the value of that decision?

Because they made a bad decision and publications like this go and interview them and make them some sort of victim celebrity, we empower failure. This is the problem with the direction.

Accountability folks. The lending company must be accountable for their overhead and their desired profit margin. If they were not getting desired results, they would sweeten the deal. Its called sales, and closing the deal.

The buyer must be accountable to his or her self interest. They decided that the risk of losing the car did not outweigh the benefit of the use of that capital for the month. At the end of the month, if they are not happy with that decision, they are now in a severely disadvantaged bargaining position. They can either choose to execute the initial agreement and lose the car or enter into a new agreement to cover the refinancing of their defaulted loan.

Government now operates with the notion that 80% of us are incapable of taking care of our own affairs. Unfortunately, in the process, government punishes the 20% that is fully capable of taking care of themselves.

Government does this by imposing mediocrity upon the 20%. This takes many forms including a social security benefit that bares no relation to our contributions to the system because it has become a redistribution model where high earners paying in as much as 3x more than low earners do not get anywhere near the 3x benefit from the system because these excess contributions are redistributed to provide higher benefits to lower earners.

Now, with health reform, the middle class will suffer the indignities of a healthcare system that redistributes health wealth from the middle to the poor. This is Obama’s “middle out” strategy because the rich will have and continue to have the very best care. The politicians of course make sure they get higher quality healthcare and higher retirement benefits because they will never subject themselves to what they subject their subjects to.

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